Iceland's central bank slashed its key interest rate and lowered the reserve requirement for banks in a surprise move on Wednesday as the economic outlook deteriorates amid the coronavirus, or Covid-19, outbreak.
The Monetary Policy Committee decided to cut the key interest rate, which is the seven-day term deposit rate, by 50 basis points to 2.25 percent, the Central Bank of Iceland said in a statement. The previous change in the rate was a 25 basis point cut in February. Policymakers also decided to lower the average reserve requirement for banks to zero from 1 percent. The fixed reserve requirement was maintained at 1 percent.
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